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American Innovation Lies on Weak Foundation?

nytimes.com

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Re: American Innovation Lies on Weak Foundation?

#31

Post by WalterBright »

roymurdock wrote: post #21
WalterBright wrote: post #11

> Corporate executives, their compensation tied overwhelmingly to short-term gains in the market value of their companies, may be responding accordingly. I hear this all the time, and it's absurd. The high P/Es of innumerable companies (like Amazon) are compelling evidence that investors are well aware of the long game companies play and they approve of it. The charge that companies are eating their seed corn to sati…

This is simply not true. The stock market is notoriously short sighted. Many investors are playing a game of musical chairs/the bigger fool because they know the economy works in a cyclical fashion with alternating booms and busts. So during boom times (now) investors will continue to push money into the market, pumping up PE ratios, with each investor thinking he/she is smart enough to exit before the next bust. If…

> they know the economy works in a cyclical fashion with alternating booms and busts.

It's a chaotic system with an upward bias. Cyclical implies temporal predictability, and good luck with that :-)

Re: American Innovation Lies on Weak Foundation?

#33

Post by [deleted] »

gjkood wrote: post #10

What about the people angle (as in People, Process, Technology)? I don't know how it used to be 20, 30 or 50 years ago, but if you have sat in a graduate science/technology/engineering course classroom in any US university in the last few years and surveyed the demographic profile of your fellow classmates you might notice something. The percentage of students of Asian ethnicity will probably outnumber all other grou…

[deleted]

Re: American Innovation Lies on Weak Foundation?

#34

Post by roymurdock »

paulpauper wrote: post #23
roymurdock wrote: post #21

Earlier quoted context omitted.

This is simply not true. The stock market is notoriously short sighted. Many investors are playing a game of musical chairs/the bigger fool because they know the economy works in a cyclical fashion with alternating booms and busts. So during boom times (now) investors will continue to push money into the market, pumping up PE ratios, with each investor thinking he/she is smart enough to exit before the next bust. If…

But PE ratios today, unlike in the late 90's, are not that high. Stocks, especially large cap technology and large-cap consumer like Nike and Disney, may still be a good value

It's a safe bet that most blue-chip companies with stable revenues and time-tested business models will be just as big, if not bigger in 10-20 years. They'll take a hit when the economy inevitably enters the bust phase of the business cycle, but people will still be buying shoes and coke.

It's the PE of companies like Facebook and Twitter, who derive their earnings from questionable business models (notoriously hard to measure ROI on advertising, millions of fake/spam accounts, possibility of disruption ala Myspace) that I would be concerned about.

Re: American Innovation Lies on Weak Foundation?

#35

Post by munin »

gjkood wrote: post #10

What about the people angle (as in People, Process, Technology)? I don't know how it used to be 20, 30 or 50 years ago, but if you have sat in a graduate science/technology/engineering course classroom in any US university in the last few years and surveyed the demographic profile of your fellow classmates you might notice something. The percentage of students of Asian ethnicity will probably outnumber all other grou…

> Fewer US based students are going into graduate STEM programs

Because if you're a US citizen, getting a PhD for the money is a racket. Just take your BS in CS over to Silicon Valley and start making bank working on Tinder for Dogs. Want to make six figures and have a shot at a billion dollars? The surest way to NOT do that is to go to grad school.

If you're NOT a US citizen, getting a graduate degree is a great way to get into the US, do work that gets you noticed by big companies or labs, and then get a job at those companies or labs once you graduate. Many of those jobs will be in the US, and having a PhD will make your visa application smoother (so I hear) because you have an advanced degree.

Foreign students have more to gain, so more apply. That's not hard.

p.s. for the US overall, in 2013[1] 47% of the students enrolled in math & CS were permanent residents, so it seems unlikely that your statement "The percentage of students of Asian ethnicity will probably outnumber all other groups combined" is true.

[1] http://cgsnet.org/ckfinder/userfiles/files/GED_report_2013.p...

Re: American Innovation Lies on Weak Foundation?

#36

Post by roymurdock »

WalterBright wrote: post #31
roymurdock wrote: post #21

Earlier quoted context omitted.

This is simply not true. The stock market is notoriously short sighted. Many investors are playing a game of musical chairs/the bigger fool because they know the economy works in a cyclical fashion with alternating booms and busts. So during boom times (now) investors will continue to push money into the market, pumping up PE ratios, with each investor thinking he/she is smart enough to exit before the next bust. If…

> they know the economy works in a cyclical fashion with alternating booms and busts. It's a chaotic system with an upward bias. Cyclical implies temporal predictability, and good luck with that :-)

> Cyclical implies temporal predictability

Sure, I can say with 99.9% certainty that the economy will contract within the next 100 years. Shorten the time frame and my confidence level will drop accordingly. I'd probably have a 0.1% probability of guessing within 30 days of when the business cycle will reverse.

Re: American Innovation Lies on Weak Foundation?

#37

Post by WalterBright »

roymurdock wrote: post #36
WalterBright wrote: post #31

Earlier quoted context omitted.

> they know the economy works in a cyclical fashion with alternating booms and busts. It's a chaotic system with an upward bias. Cyclical implies temporal predictability, and good luck with that :-)

> Cyclical implies temporal predictability Sure, I can say with 99.9% certainty that the economy will contract within the next 100 years. Shorten the time frame and my confidence level will drop accordingly. I'd probably have a 0.1% probability of guessing within 30 days of when the business cycle will reverse.

You're describing a characteristic of a chaotic system. People who have tried to make money using cyclical predictions of the stock market have terrible returns. The only things stock market cycle theories predict is the past.

Re: American Innovation Lies on Weak Foundation?

#38

Post by Frqy3 »

WalterBright wrote: post #26
roymurdock wrote: post #21

Earlier quoted context omitted.

This is simply not true. The stock market is notoriously short sighted. Many investors are playing a game of musical chairs/the bigger fool because they know the economy works in a cyclical fashion with alternating booms and busts. So during boom times (now) investors will continue to push money into the market, pumping up PE ratios, with each investor thinking he/she is smart enough to exit before the next bust. If…

Which companies do you believe are eating their seed corn, and are you shorting their stock?

“The market can stay irrational longer than you can stay solvent.”

Often attributed to Keynes, though may have originated with Shilling (or been in common use).

Re: American Innovation Lies on Weak Foundation?

#40

Post by [deleted] »

munin wrote: post #35
gjkood wrote: post #10

What about the people angle (as in People, Process, Technology)? I don't know how it used to be 20, 30 or 50 years ago, but if you have sat in a graduate science/technology/engineering course classroom in any US university in the last few years and surveyed the demographic profile of your fellow classmates you might notice something. The percentage of students of Asian ethnicity will probably outnumber all other grou…

> Fewer US based students are going into graduate STEM programs Because if you're a US citizen, getting a PhD for the money is a racket. Just take your BS in CS over to Silicon Valley and start making bank working on Tinder for Dogs. Want to make six figures and have a shot at a billion dollars? The surest way to NOT do that is to go to grad school. If you're NOT a US citizen, getting a graduate degree is a great way…

[deleted]
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